What is the TPP?

The Trans-Pacific Partnership Agreement

(TPP) is a trade agreement currently being
negotiated between Australia, Brunei
Darussalam, Chile, Canada, Japan, Malaysia,
Mexico, New Zealand, Peru, Singapore, the
United States and Vietnam. It will account
for roughly 40% of global gross domestic
product and a third of world trade. The
comprehensive plan covers, among other
areas, government procurement,
intellectual property, electronic commerce,
labor protections, food safety, animal and
plant health, competition policy and state-
owned enterprises. Membership is by
invitation only.
TPP Updates
Volume 1 Issue 7 April 2014
Recent developments on the Trans-Pacific Partnership gathered from third party sources as
indicated in the provided hyperlinks.
T
he Philippines is now working to ascertain how participation
in TPP can be realized, President Benigno Aquino III announced in
a joint press conference on 28 April following his meeting in
Malacanang with President Barack Obama, Rappler.com reports.
The US President was in Manila for the last stop in an Asian tour
that included Japan, Malaysia and South Korea during which
analysts such as Michelle FlorCruz of the International Business
Times say the leader was expected to make a push for the TPP.

Japan and Malaysia are members of the agreement, but disputes on
market access for agricultural and automobile products, and
preferential treatment for state-owned enterprises, among others,
have hampered negotiations. South Korea and the Philippines, on
the other hand, though not currently part of the TPP, have
expressed interest in joining the free-trade agreement.

For his part, President Obama said he had encouraged
President Aquino to seize the opportunity hes created by
opening the next phase of economic reform and growth.

The Philippiness annual economic growth rate of 7.2 percent in
2013 is one of the fastest growth rates in the world, and
membership in the TPP could give further substantial boost to its
economy, says CNBCs Katie Holliday. In addition, according to
Rappler, the Philippine trade and finance (continued next page)
Pres. Aquino: PH looking
into path for participation
TRADE seeks to advance inclusive growth by
improving the Philippines global standing in the
international economy through higher levels of
trade and foreign direct investment. It also works
to ensure that national trade regimes conform to
international standards.
TPP Briefs: China shows
more signs of openness to
TPP; No rush to meet
deadline, says US official.
4
International
news:
3

Can the US stand by a TPP
deal without fast-track
authority?

PH envoy urges private
sector to work more
closely with
government.
2
Local news:
Philippines now working to
ascertain ways for
participation; Trade
Secretary tells CNBC there is
strong interest in
membership; PCCI, MBC
support moves to join pact.
The TRADE Project
3F Herco Center,
114 Benavidez Street,
Legazpi Village, Makati City 1229
Tel: (02) 843-0612; 843-4704
Fax: (02) 823-7835
1


Engage more
with government,
PH envoy urges
private sector



T
he private sector needs to be more
engaged with the government in preparing for
the Philippines possible entry into the Trans-
Pacific Partnership agreement, according to
Philippine Ambassador to the US Jose Cuisia Jr.
Philippine Star reports that the ambassador made
this call at a joint meeting of the Makati Business
Club (MBC) and Management Association of the
Philippines (MAP) held early this month, during
which Cuisia also urged exporters to actively
promote Philippine food and beverage products
in order to tap more opportunities available in
the US market.


The government cannot do it alone, Cuisia said.
We need to see more engagement from the
private sector to promote themselves and in so
doing, promote the Philippines. He noted that
food exports from other countries in Southeast
Asia have already made it to the shelves of
mainstream US supermarkets, manufactured and
packaged to attract a market of US consumers
larger than and beyond the Fil-American
community.

Cuisia added that the private sector needs to
work with government in giving information on
the costs and benefits of the TPP, along with
recommendations on how to prepare for what
has been called a 21
st
century trade agreement.
Last month, government officials began
consultations with their counterparts in
Washington about the possibility of membership.

In a separate interview with the Philippine Daily
Inquirer, Cuisia also said that the US-Philippines
Society (USPS), a group of Filipino and American
businessmen co-chaired by tycoon Manuel V.
Pangilinan and former US (continued on page 4)
PRES. AQUINO: PH
LOOKING (from p. 1)
2 TPP Updates/April 2014

departments are pushing for participation, to
avoid losing the countrys share of the US market
to regional neighbors who have joined the TPP
such as Brunei Darussalam, Malaysia, Singapore
and Vietnam.

In an interview via satellite with CNBC and posted
on that stations website, Department of Trade
and Industry Gregory Domingo said studies have
shown the TPP benefits of the Philippines. He
noted that there is a strong desire from the
Philippines to be a part of the pact. Asked if it
would not be more important to pursue a
bilateral relationship than working hard on the
TPP which may not come given the difficulties in
negotiations, Domingo said: I think at some point
TPP will come. He added that, from the
Philippine standpoint, we have to pursue both
the bilateral track and the regional trade fora. Not
doing so will be to ones peril. If we can get
progress on both, that would be ideal.

Business groups such as the Philippine Chamber of
Commerce and Industry (PCCI) and the Makati
Business Club
(MBC) have
supported the
countrys plan of
entering the TPP.
In January, Manila
Standard Today
quoted PCCI Vice
Chairman Donald
Dee as saying they
had agreed to
join the effort to
open up the
market. Dee has
called for an
advocacy agenda
to educate SMEs
on bolstering their
competitiveness. On the eve of President Obamas
state visit, MBC Executive Director Peter Perfecto
told Philippine Star: If Japan and US, two of our
largest trading partners are in the TPP, we should
try to find a way to be part of it also, that will be
mutually beneficial.
Studies have
shown the TPP
benefits of
the Philippines.
There is a
strong desire
from the
Philippines to
be a part of
the pact.

Sec. Domingo

TPP Updates/April 2014 3

Fast-track authority, also known as the Trade
Promotion Authority (TPA), allows the US
President to negotiate trade agreements such as
the TPP which Congress may not amend, but only
outright reject or approve. In the past it had been
used to negotiate trade pacts like the NAFTA, but
after the authority expired in 2007, efforts to
renew it have been met with opposition.
Lawmakers even those from President Obamas
own Democratic Party cite in an open letter to
the President the failure of trade negotiators to
provide adequate consultation with Congress.

There are those in other TPP countries who are
beginning to wonder if the absence of fast-track
would be an insurmountable obstacle in sealing a
final deal. For instance, Michael Khor, a columnist
for the Malaysian Star Online, recently questioned
how if and when a TPP deal gets struck the US
can stand by it if President Obama is unable to get
fast-track authority from the US Congress. He
writes that without fast-track, Congress can decide
to alter parts of the TPP, and so
[w]hat was agreed to after years of painful
negotiation will then unravel. Why then should the
other countries table their bottom line in the
TPPA when what is agreed to can be opened up
again by Congress?

Khor went on to say that senior officials in some
other TPP countries have indicated they will not
sign unless the US President obtains fast-track
authority. Similar sentiments seem to reign in New
Zealand, where Reuters reports negotiators are
adopting a "more realistic" view of the TPP in the
face of resistance to fast-track. The article also
quotes the head of a Singapore think tank as saying
that other countries are worried negotiations may
turn out to be pointless if we have to re-
negotiate to get it past Congress.

Even before Obamas April tour of Asia,
negotiations between the US and Malaysia, for
instance, had been facing difficulties on issues
including intellectual property and medicines,
investor-state dispute, and bumipatra, or the
state policy giving preferential treatment to
ethnic Malays in government procurement. In a
joint press conference with Prime Minister Najib
Rajak upon his arrival in Malaysia, President
Obama spoke about the opposition involving fast
track authority.

I got protests back home from my own party,
Obama was quoted in a Kyoto news article
carried by the Nikkei Asian Review. Theres never
been a trade deal in which somebody is not going
to object because they are fearful of the future or
they are invested in the status quo.

Fast-track authority was also brought up during
Obamas visit to Japan, where the toughest
negotiations have involved market access for
agricultural and automobile products, according to
an article in Inside US Trade. Acknowledging Prime
Minister Shinzo Abes own political opposition to
liberalizing trade in products such as beef and pork,
Obama said that Abe had to deal with his politics;
Ive got to deal with mine, but that we have to
sometimes push our constituencies beyond their
current comfort levels because ultimately its going
to deliver a greater good for all people.

Reuters reports, however, that some US officials
say such concerns about the absence of fast-track
authority are overdone. It cites former White
House international economic adviser Matthew
Goodman as saying the talk of countries being
unwilling to seal a pact because of the uncertainty
of fast-track approval was "more of a negotiating
tactic," and that once a pact was sealed, passing it
in Congress would get easier. House Minority
Leader Nancy Pelosi, a staunch Obama ally, herself
recently rejected a bipartisan bill seeking to renew
fast-track authority, though, as reported by World
Trade Online, she did reiterate she was merely
rejecting the proposed bill in its current form
and not President Obamas trade agenda.
Can US keep its end
of the deal without fast-track?

4 TPP Updates/April 2014
Ambassador John D. Negroponte, will
bring
to the country a delegation of
American businessmen for a trade
and investment mission this year. It
will not be the first such mission, as a
USPS-led delegation had met with
President Aquino last year to explore
opportunities for trade and
investment, said Cuisia, adding that
this all pointed to how interest in the
Philippines as an investment site is
definitely growing.

Meanwhile, Department of Finance Secretary
Cesar Purisima has proposed that all 10 ASEAN
countries be invited to join the TPP, since leaving
some nations out could cause resentment in
Southeast Asia with TPP members
given preferential access to the US
market. In an interview with the
Inquirer, Purisima said that with
only 4 ASEAN members as part of
the TPP, the rest, including the
Philippines, could resent the
preferential treatment especially
as we continue to integrate.
Further, he added that a blanket
invitation to all of ASEAN would
encourage reforms, and said the
Philippines would have little
choice apart from enacting needed constitutional
or legislative changes if exclusion from TPP began
hurting businesses and jobs.
More signs of openness in China

Chinese premier Li Keqiang has asserted that
the nation maintains an open attitude to the
TPP, and will be happy to see the pact
concluded as long as the TPP is conducive
to promoting global trade and an equitable
and open trading environment. Li made the
statement in a keynote speech delivered
before the Boao Forum for Asia on 10 April,
according to Chinas state-run CRIEnglish.com.
Li also said that China is committed to uphold
the World Trade Organizations (WTO) role
in global trade developments, but both RCEP
and TPP should become important
supplements.

The RCEP is a trade agreement that includes
the 10 ASEAN members plus China, Japan, the
Republic of Korea, India, New Zealand and
Australia, and has been seen by some as
Chinas way of countering the US-led TPP. But
a piece in The National Interest seeks to dispute
this, saying that recent developments have
pointed to a more welcoming attitude in
China towards the TPP, particularly following
increased progress toward a China-US
Bilateral Investment Treaty. China is no
longer dismissive of the TPP, the
article notes, adding that its leaders recognize
the TPP will be setting the rules for the next
phase of global economic development, and
believe Beijing cannot afford to be left out of
that process.

No rush to meet
specific deadline

A meeting of TPP chief negotiators is
scheduled for 12-15 May in Vietnam, to be
followed by one attended by TPP trade
ministers during an Asia-Pacific Economic
Cooperation (APEC) summit in Qingdao,
China from 17-18 May, the Vietnamese English
-language Thanh Nien News reports.

According to a US official who requested
anonymity, currently the TPP nations arent
holding themselves to meet a specific
deadline, and are taking the time necessary in
order to craft a good agreement, even as
negotiators reportedly had been accelerating
their work before US President Barack
Obamas visit to Japan, Malaysia, the
Philippines and South Korea this month. Inside
US Trade reports that the chief negotiators
meeting in May would likely follow the format
of the February gathering that took place in
Singapore, which essentially was an unofficial
negotiating round.

TPP Briefs
ENGAGE MORE
(from p. 2)
Trade and
investment
missions in the
last two years
point to how
interest in the
Philippines as an
investment site is
definitely
growing.